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Starbucks says it is slowing down new-store growth and shuttering 150 stores in saturated markets in fiscal 2019. The company usually closes about 50 stores annually in adjusting its portfolio.
The Starbucks Americas segment, which comprises nearly 14,000 stores and accounts for about 70 percent of total company revenues, posted same-store sales growth of 3 percent in fiscal 2017, down from 6 percent in the year-ago period. In the first six months of fiscal 2018, that segment posted 2 percent same-store sales growth, down from 3 percent in the year-ago period.
"While certain demand headwinds are transitory and some of our cost increases are appropriate investments for the future, our recent performance does not reflect the potential of our exceptional brand and is not acceptable,” said Starbucks President and CEO Kevin Johnson in a press release. “We must move faster to address the more rapidly changing preferences and needs of our customers."
Starbucks says it has received 5 million new digitally registered customers since April 2018
Starbucks says it expects to drive more sales at its shops using its loyalty program. The company also notes that it has received 5 million new digitally registered customers since April 2018, as well as 2 million active Starbucks Rewards members, which now number 15 million, up 13 percent from the previous year.
For fiscal 2019 the company says it anticipates that digital initiatives will contribute one or two points of same-store sales growth in the U.S., supported by a redesigned Starbucks Rewards program offering more choices around redemptions and payment as well as expanded digital customization options.
By Brannon Boswell
Executive Editor, Commerce + Communities Today
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